Economy

South Korea's economy was largely agricultural at the time of the Korean War (1950–53), when much damage was inflicted on the nation. Reconstruction and recovery were rapid after the war, in part because of large amounts of economic aid from the United States and other nations. In the early 1960's industry began to grow rapidly; by the mid-1980's South Korea had become one of the world's chief exporters of manufactured goods.

The South Korean government played a major role in directing and developing the economy, particularly through central planning and direct and indirect control of many manufacturing industries and banking. Rapid industrial development was also aided by large investments of capital and technology from the United States and Japan and by an abundance of skilled, cheap labor.

Though few in number, corporate conglomerates, called chaebols, produce most of the nation's goods and services.

Light manufacturing industries requiring much labor were the first to be developed, mainly during the 1960's. Textiles, clothing, shoes, and similar consumer items were among the main goods produced. Priority shifted during the 1970's to the development of heavier and more technically advanced industries. Production included machinery, automobiles, ships, steel, chemicals, refined petroleum products, and electronic equipment. South Korea also developed a large engineering industry, with construction projects in many parts of the world.

Since the early 1980's increasing emphasis has been placed on developing high-technology industries, centering mainly on dataprocessing equipment, especially computers. Much military equipment is also produced. Seoul, Pusan, and Inchon are among the chief manufacturing centers.

Only about 20 per cent of South Korea is suitable for farming, and roughly one-fifth of the people are dependent on agriculture for their living. Farms average about 3 acres (1.2 hectares) and are privately owned. Some farming is done by cooperatives.

Rice, grown on about 65 per cent of the farmland, is the staple food and by far the chief crop. Rice yields are high, but production is insufficient to meet the nation's great demand. Much rice is imported. Other crops include onions, potatoes, barley, soybeans, melons, and apples. Farm machinery, hybrid seeds, and fertilizers are widely used. Chickens, hogs, and cattle are the main farm animals.

Offshore and distant deep-sea waters yield a large amount of fish, an important food in the nation's diet. South Korea ranks among the world's top 10 fishing nations. Ulsan and Masan are the chief fishing ports. Many freshwater fish are produced in ponds.

The forests of South Korea, which have been excessively cut, are poor in quality. South Korea imports large amounts of lumber, most of which is processed into plywood or veneer. Mineral deposits are few and generally small. Minerals produced include coal, iron ore, and graphite.

South Korea has greatly expanded and improved its transportation facilities since the early 1960's. Highways have replaced railways as the chief means of intercity transport. The railways are owned and operated by the government; many are electrified. There are subways in Seoul and Pusan. Inchon's airport is the largest and busiest of several international terminals. Korean Air and Asiana Airlines provide domestic and international service. Coastal and overseas shipping is important and is conducted at numerous ports, chief of which are Pusan and Inchon.

South Korea trades mainly with the United States and Japan. Foods, industrial equipment, and raw materials, especially crude petroleum, make up most of the imports. Exports consist almost entirely of manufactured and processed goods.